13 April 2010
In India These terms are defined by section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956)
(aa) "corporatisation" means the succession of a recognised stock exchange, being a body of individuals or a society registered under the Societies Registration Act, 1860 (21 of 1860), by another stock exchange, being a company incorporated for the purpose of assisting, regulating or controlling the business of buying, selling or dealing in securities carried on by such individuals or society;
(ab) "demutualisation" means the segregation of ownership and management from the trading rights of the members of a recognised stock exchange in accordance with a scheme approved by the Securities and Exchange Board of India;;
13 April 2010
An example for the same would be the corporatisation & demutualisation of the Bombay Stock Exchange to Bombay Stock Exchange Ltd. which is the most popular scheme.
Before the scheme BSE was an Association of person and then after the scheme it became BSE Ltd. i. e. a limited company and this is called corporatisation.
Before the scheme both membership right & right to trade where held by the trading member only. Before demutualisation, 790 broker-members held 100% in the 131-year-old exchange.
After the scheme corporatisation ownership & membership right hae been segregated
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